We have used primary monolayer cultures of hepatocytes from rats fed standard and cholestyramine-diet to study the effects of 17 beta-estradiol and progesterone on the activity of cholesterol 7 alpha-hydroxylase (EC 1.14.13.17) and bile acid synthesis. Cholesterol 7 alpha-hydroxylase activity in hepatocytes freshly isolated from rats fed either diet mentioned above declined gradually during attachment and the first day of culture. Exposure of cell monolayers to 1 or 10 microM estradiol or progesterone resulted in rapid and transient increases in cholesterol 7 alpha-hydroxylase activity, the maximal stimulation of enzyme activity being observed after a 6 h culture period. Bile acid synthesis in standard cells was markedly activated by both hormones, but in cholestyramine cells only the effect caused by 10 microM progesterone was significant. The cellular content of total bile acids was not significantly altered by the presence of the hormones, except by 10 microM progesterone, which provoked an initial cellular depletion of bile acids that was rapidly restored. Bile acid output was enhanced by treating primary cultures with 10 microM estradiol or progesterone, but whereas the increases caused by progesterone were marked and sustained, those caused by estradiol were minor and transient. We conclude that progesterone and 17 beta-estradiol, in this order of potency, enhance short-term bile acid synthesis in rat hepatocyte monolayers.